According to Realtor.com’s latest Monthly Rental Report for January, as housing affordability issues mount in America’s largest markets, new data shows that many renters transitioning to first-time homebuyers could save on monthly payments, compared to rental expenses.
For the first month of the year, the monthly cost of buying a first-time home was more affordable than renting a similar size unit in the 26 of the 50 areas largest metropolitan areas, led by cities such as Birmingham, Alabama, Cleveland and Pittsburgh.
According to the report, purchasing conditions remain competitive in the country, so initial savings could be achieved monthly payments on housing largely attributable to skyrocketing rents. In January, the median rental price in the United States increased by double digits for the eighth month in a row, which is 19.8% more than the previous year.
Compared to the growth in the monthly cost of purchasing a home with up to two bedrooms (11% year over year), all rental unit sizes posted annual gains highest in January: Studios, a 21.0% more ($256); 1 bedroom, up to 19.2% ($266); and 2 rooms, a 19.2% ($323) more.
January data shows that national rents continued to increase in double digits over the past year, and at a faster rate than the prices of homes for sale.
“In fact, much faster than even as initial monthly housing costs rose in many of the pro-buying markets, rents for a similar sized unit were a19% higher,” said Danielle Hale, chief economist at Realtor.com, “While the costs of renting and buying homes are rising, a number of factors could tip the affordability scale in favor of first-time homebuyers for many Americans this year.”
According to Realtor Forecasts. com rents to outperform listing price growth in 2022 are already accelerating in all sizes of u units.
The survey data shows that the owners plan to increase the rental prices this year, but finally the decision to buy versus rent depends on personal circumstances such as where you want to live, the financial situation of the buyer and how long they want to live in their next home.
“As mortgage rates continue to rise, those looking to buy their first home in 2022 find lower costs now than later in the year, but home selection is expected to improve as we head into spring, when many homeowners aim to put their homes up for sale” , Hale explained.
The data from January indicate that rising rents are increasingly driving relative affordability in the entry-level home buying market, despite rising listing prices and mortgage rates.
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